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Worldwide Exchange

News/Business. Ross Westgate, Kelly Evans. Ross Westgate and Kelly Evans consider the business stories that have global significance. New.

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China 43, U.s. 22, Us 20, Europe 18, Jack Lew 14, Ecb 11, Spain 8, Venezuela 7, United States 6, Ross 6, Herbalife 6, Tim Geithner 5, Treasury 5, England 5, Italy 4, Draghi 4, Dennis Mcdonough 4, Apple 4, Sylvia 4, John Harwood 3,
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  CNBC    Worldwide Exchange    News/Business. Ross Westgate, Kelly Evans. Ross Westgate and  
   Kelly Evans consider the business stories that have global...  

    January 10, 2013
    4:00 - 5:59am EST  

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this is today's a "worldwide exchange." i'm ross westgate. here are your headlines from around the world. chinese exports blow past expectations in december. raising expectations for next week's fourth quarter gdp. investors are still cautious ahead of the interest rates issues in europe. three issues, the new 2015 included a clause to make restructuring easier in the event of default. all right. welcome to the program. if you've been watching in europe or asia, you might have
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seen "squawk box" in europe today. we'll miss that. but she's done her day's work. tim cook is back in china for the second time in less than a year. we'll be back in shanghai for analysis. this is what the future looks like. no, not me, but in vegas where we view the latest gadgets at the electronics consumer show. we'll find out how mario draghi plans to shape the year. plus, the oscars, we'll look at the favorite to pick up the golden statue from los angeles at 11:40 e.t. lincoln got ten nominations yesterday. but first, china hs surprised the market with a very strong set of trade numbers. exports for december blowing past expectations hitting a seven-month high. our china correspondent has the details for us and joins us in
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singapore. hi, eunice. even orr iron ore is up a bit w will reflect the commodity prices. >> yeah. and these numbers blew everybody away especially after the november numbers came in so poorly that everybody's expectations were managed downwards. the exports came in at 14.1% for december. imports came in strong at 6% for december, as well. so all the numbers look pretty good. now, the reason why people were so thrown off by these numbers was just because the data has been showing that the weakness in europe as well as the weakness in the united states has been a really -- having an impact here in china, especially on the manufacturing sector. but that particular month, of course, of december looks as though it was looking relatively decent. we saw the u.s. shipments looking strong, very strong, in fact. and a turn around also in europe.
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now, the big question that people are asking for china is just how sustainable this is going to be. will the manufacturers still be able to pump out a lot of these goods? is there going to be worldwide demand? so far from what we're hearing from factories, there is a bit of concern because a lot of those orders, as they had come in in december, were short-term. they weren't these longer term shipments, orders that would be something a little bit more reliable. so initial response, probably something that we're going to have to wait and see how sustainable this pick up is. >> yeah. well, sustainability is going to be the watch. thanks for that. good to see you there in singapore and joining us for the first hour today of "worldwide exchange," david bloom from hsbc. just how sustainable do you think? >> the hard landing scenario we were hearing about three months
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ago was a bullish scenario. we never believed in the hard landing. we've always had it steady as she goes. china is growing and i think people, you know, come out woodwork every time it slows down. and you can see now it's powering ahead again. >> now, normally historic lows over the last year, what's happened in the proxy play for china has been the aussie/dollar. has that broken down? >> the aussie held up relatively well. but last night, there were retail sales numbers out of australia. the australia dollar does nothing. you get strong china dollars and it seems that aussie wants to be a bit bullish and bearish and wrong. >> so what's going to win out? are you changing your -- >> no, no. >> like the european politicians and believing in the euro
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project, are you? >> well, i was. breaking up, wouldn't be here -- >> you're going to tell me that you're convicted on the aussie/dollar. >> no, i'm not convicted. i'm admitting that i've been wrong. we think aussie is terribly overvalued and that's the problem, frankly. >> good to have you on. plenty more to come from you. the ecb is going to keep its interest rates at a record low today. that's what we expect, anyway. the markets will be listening to the delivery tone of mario draghi's delivery. silvia wadhwa is back at her delivery post. 2013 [ speaking foreign language ]. >> everything is going to stay
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the same. the ecb hasn't got anything to do right now. they've pretty much said everything on track, probably the best, cheapest intervention they had so far was the program. every month announced again. we stand ready to act, but so far they haven't had to do anything because nobody has asked for an omt program yet. but the market believes that the ecb is there as the backstop. so far, that was very successful. in terms of anything else they can do, we started by saying they're keeping rates at record low, yes, absolutely, but they're not putting them any lower right now. that's not really the high point of discussion. as well as money market operations are concerned, they put everything on track that they can put on track right now. the two big ltros and all the regular money market operations, money on tap at fixed rate. not that much more they can do as a confidence enhancing measure for the banks, either.
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the macro story is at least stabilizing. i think the panic -- the finger is off the panic button in europe right now which, of course, could be the biggest danger. the biggest danger being at the moment the finger is off the panic button. politicians usually relax their efforts in sorting things out. that might be the biggest danger as we head into this new year. >> sylvia, how shocked would you be if they cut the positive rates went into negative territory? it wouldn't be a massive surprise, but, you know, how would you take it yourself? would you be totally shocked by that? >> after i've had to eat my hat with feathers when mr. draghi surprisingly lowered interest rates at the first session, i stopped being shocked by anything that he does. no, not shocked. i would be surprised at this stage because there isn't a sense of urgency in there. pushing into negative rates is a little bit of driving it over the edge for the ecb.
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they know there's no technical problem with it. they can do it. but as i said, we're not quite in panic mode right now. maybe they want to keep this for a later day. i would be surprised, but not shocked. >> all right. sylvia, plenty more to come from you throughout the course of the day here on cnbc. requisition 1:45 cet, 12:45 bst and we get the press conference, as well, at 3:30 cet. david, how is the euro? >> last year we had euro/dollar going to 1.35. it ended around 1.32. but this year we have a pretty boring forecast, 1.35. we don't see the -- lasting in euro/dollar. more on sterling, more on the yen. i think we're moving away from the fixation about euro/dollar. and it seems strange that
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everything is saying that the ecb or european politicians aren't able to do anything. and so i think we'll have to watch europe very carefully. but i think the break-up risk is coming out of the market. >> yeah. it appears to be the case. and we have something to watch today in spain, as well. it's the first bond auction of the year for the al beeran company. the treasury is slashing the debt market up to 5 billion euros since 2013. lloyd's expects a positive results with the first take up. it will be the first issue to feature a collective action clause, designed to make it easier for the government to restructure debt in the case of future crisis. and president obama is expected to make the final touches to his second term economic team today. cnbc's john harwood has more on the changes coming to the u.s. treasury department. >> president obama has already
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filled out the members of his national security team for the second term. now he's filling out the economic term for a second term including his choice for treasury secretary. later today, we expect the president is going to appoint his current white house chief of staff jack lou as current treasury secretary. jack lew is a veteran of capitol hill and of more than one big major budget negotiations which is exactly what the president is facing right now. he's somebody with a low key demeanor who gets along well with others. his confirmation is expected to be not too difficult. what he doesn't provide is a strong business background or wall street ties, although he did work for citigroup for a while and he doesn't have the experience in financial regulation that tim geithner brought to the job having head of the federal reserve bank of new york during the financial crisis. but jack lew is expected to be announced today. the pecked speculation about his replacement as white house chief
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of staff has centered in the last 24 hours around dennis mcdonna. sources tell me that dennis mcdonough is the chief candidate. ron biden has already been a contender. wool see whether the president pairs the announcement of a new chief of staff with jack lew's appointment today. >> so jack lew seems to have the nomination locked up. danny krugman is expected to be looked go ahead at for treasury secretary. still, that's a subject for great discussion. now let's bring you up to speed with the action on today's
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global markets report. will i sixuan is with us. hi, sixuan. >> thank you, ross. that surprising number in trade data has helped beat sentiment in asia. the sensex index had a fresh 19-month high in trade before closing up .6%. airline stocks on upgrades. the shanghai composite finished in the green, up .4%. the nuclear power sector surged after it resumed its nuclear project after a 20-month suspension. some agriculture stocks topped the gains in that market. the nikkei 225 was pushed higher. the yen was around 288 handle against the greenback. new prime minister shen zoe abe asked the bank of japan to adopt a 2% inflation target officially. samsung electronics rebounded
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about 2% on bargain hunting. the kospi snapped a five-day losing streak, ending higher by .75%. and the options over china gave a lift to the australia markets. the asx 200 reversed earlier losses to end marginally in the green. data showed china's imports of iron ore soared past 17 million pounds for the month of december. the sensex is trading lower by about .1%. >> sixuan, thank you. we'll keep you again here in europe. the ftse 100 is at the highest level of the last year for a close. the ftse 100 up .06. the ibex down 10, the cac 40 down 11 points.
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a couple markets, forced into releasing results last night. there was a leak and then having the full conference call, disappointing figures marks & spencer trading down 4.74%. pretty good numbers for tesco. a bit of a shocker last year, not the same this year. the stock right now, up 2.2% be, as well. ten-year spanish yields ahead of that, a little higher. italian yields, up 4.25%. and the bank of england coming up, 10-year gilt yield, a high of 27024% is where we stand right new. trying to change the calculation for state pension, that isn't going to happen which means there will be more pressure on george osborne for finances, as well. on the currency markets, we
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haven't got it up. we'll switch that back. sterling/dollar, 1.6020. euro/yen, 115.17. euro/dollar at 1.3066. quick look at commodities after the chinese data, 1.1234. spot gold firm at 1669, as well. you would think, as well, that somebody is doing fairly well on that. iron ore imports at a record of 70 billion tons. we'll take a short break. still to come, tim cook is in china. we'll look at what he needs to do to turn around apple's underperformance in the world's top global market. more to come on "worldwide exchange." what are you doing?
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nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today. [ male announcer ] save on ground shipping at fedex office.
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now, facebook has sent out on mysterious invites to the press. what will they be unveiling? and google earth has locations and satellite versions of north korea's prison camp as mike schmidt concludes his visit to the country. despite the nikkei's rise, find out why one investor thinks it's
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time for caution in japan. read all those stories on cnbc.com. google's chairman is making his own recourse, saying he's pushed pyongyang to open up internet access. chery has more. hi, chery. no, we don't have chery. never mind. let's move on. oh, we do have chery. there we go. confusion reigns. hi, chery. >> you have me all right, ross. return to go beijing today, the deg investigation said that the trip has been suggestive and successful. the delegation called on north korea to stop its missile and nuclear tests and also to allow more open access to information in the regime. now, mr. schmidt said north korea's decision to stay isolated will make it harder to
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catch up economically. now, let's first listen in to what he has to say in his press conference on the way back in beijing. >> once the internet starts, citizens in a country can certainly build on top of it. but the government has to do something. they have to make it possible for people to use the internet with the government in north korea has not yet done. it's their place now and time in my view, it's time now for them to start or they will remain behind. >> now, google has been expanding in asia, including china, which did pose some censorship issues. but the regime -- the chinese case is no headache according to the north korean regime where just a very small group of officials have interpret. during the visit, the delegation did not get to meet leader kim
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jung un who does not want to be viewed as an isolated country. during the visit, four-day visit, they got to visit pu pyongyang's university. that's about how much they revealed about the visit. maybe mr. schmidt will talk more about the visit in his next book. ross, back to you. >> chery, good stuff. great to see you. thanks for that. meanwhile, mr. cook is on his second trip to china in less than a year. following that story, let's go
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back twice to eunice in 20 minutes. things don't get any better than that. he's got a challenge, mr. cook. what is he going to do on this trip? >> he does have a challenge on this trip. he's been meeting with apple's partners like china unicom. china unicom sells a lot of iphones to, of course, the chinese. it confirmed that tim cook was at their offices and that they had a very productive conversation. of course, what everybody is wondering is whether or not he's going to have productive conversations with china union come's archrival, china mobile. china mobile is the largest telecom company in china. apple does not have a relationship with them right mow. because of that, people are hoping that he and the company who, of course, has other executives, will be able to somehow broker some sort of deal, if not on this trip, at some point this year in order to get access to the 700 million
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people and people are saying, this is going to be an amazing catalyst for the stock. >> yeah. we'll have to see how they do it. eunice, thanks for this for now. sales are going up in china, but their market share is slipping from four to six. it's before the latest phone large. why are they losing market share? what do they need to do? >> it's great to be here, ross. apple has doubled sales in 2012. they hit about 22 billion in sales in 2012. china has become their second largest market. but apple is underperforming the market share. they've dropped from fourth to six in smartphones in the last year. it's come down to this. they've doubled their number of
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stores to only eight in china which is only one or two above what they have in all of pittsburgh in the united states. so tim cook really needs to tell her she needs to push opening up for sales throughout the entire country, ross. >> extraordinary. eight shops in mainland china. they could have hundreds. why if they don't underdevelop that? >> i think under steve jobs, apple was a very angelo sent rick company. they really focused on first getting all their product into the united states and into the other english-speaking countries. apple has been very slow at localizing itunes and other languages like chinese or korean because they've just focused so much on the united states. but i think it's clear under tim cook that apple has to expand its horizons and can't look at china and other nations as secondary nations because they're going to emerge from the secondary markets.
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people still love the product. you'll see that chinese woman was in new hampshire a couple weeks ago and was tasered because she was trying to bring so many iphones back to china to sell or give to friends. they can't get product into the country fast enough. >> they need to deal with china mobile. how likely is that? >> i don't think it's that likely. probably 5%, 10% in the next five months. unlike other markets, apple is dominant. apple, they go into the united states, they can negotiate a really good deal. and china mobile, because they have over 700 million users, they're really the dominant player. so they don't need apple as much as apple needs china mobile. frankly, in china, china mobile's user base tends to be wealthier. they spend more money per month
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on data services. it would be lucrative if apple could find some sort of a deal. but i don't think it's likely in the short 2er78. >> what is he going to try to sort out on that trip? >> in the last year, you've seen apple suppliers fliek foxconn have come under pressure for working conditions. one of the problems is that labor costs are continuing to soar here. so what is happening is the suppliers are having their margins squeezed. because apple is so large, they can't go up for higher factory area because that's going to accuracy all of their prices. you have, like, over a million employ eees for foxconn in china alone.
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china might not be the place that apple should be producing in the coming five, ten years. >> foxconn has a million employees. >> it's unbelievable. they just relocated 300,000 people from southern china to the middle part of the country because labor costs are going up. in 2011, 21 of china's 31 provinces increased the averages on wages by 22%. even this year and last year is with the slowing economy, the average migrant worker economy went up 15%. so costs are still going up for consumer players that need to rely on hiring chinese workers. manufacturers have to figure out how do you deal with rising costs in china. or as apple has announced, they're going to start producing some of their products again in the united states. >> only china could conceive of moving 300,000 employees to a different part of the country.
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it is a surprising play. thanks for joining us. some news out of syria, a short range missile was launch ed and it landed in syria. still to come, we'll take a closer look at the ecb who uttered those famous words in the summer, believe me, it will be enough. will it continue to be the case as we go through the rest of 2013?
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and these are the headlines around the globe. china, up 14% on the year raising expectations for next week's q4 gdp number. investors are cautious ahead of interest rates decision necessary europe. neither the ecb nor the bank of england are seen changing their stance. and flames catching the market for the first time this year with three issues. a new deal will make restructuring easier in the case of default.
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ahead of the rates decision, european markets are fairly cautious. at the highest level since may 2008 closing up at two-year highs. 6,100, xetra dax up .2%. the cac 40, flat and the ibex, as well. as far as yields are concerned, ahead of that, you can see ten-year spanish yields slightly higher. ten-year gilt yields now reversing off its earlier 0.25%. i can tell you the ten-year index linked gilt yield are down at a record low of .97%. this is after a government sector is keeping the rpi measure for the -- for paying out pensions. now, ecb president mario draghi appears to be wielding significant influence in global markets. reuters ran a special profile earlier this week highlighting
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the changes this week. how much has changed since a year ago? silvia wadhwa is outside the ecb in frankfurt. sylvia, you talked earlier about how he surprised you at his very first meeting with a rate indicate. how about the policy announcements and the words he's uttered, what has changed about his culture and presentation? >> well, he's certainly changed his style. i've talked to many members as there was there is a change in style. there may be a change for the confidence, maybe a change in the determination at least as he portrays it in a press conference. if you look at it, there's been a lot of sort of drum roll and here r hooray and he's the man that
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changed the ecb. i don't think it's as much as it's made out to be, but certainly he has a better way of handling the market or impressing the markets with statements. look at the omc program. it has been announced. draghi has beaten home at least 50,000 times after that everything that is possible within the mandate. as far as the omt conditionality, conditionality, conditionality. at some point, the market didn't want to hear that. the market took home, we do all it takes and we've got an omt program that is going to get the spanish banks or anybody scott free. i think the market wants to believe that draghi is a completely different ecb animal as jean-claude trichet was. certainly different in style. may be different than going out on a limb. at the end of the day, he's going to toss unanimous date out the window? i think that's a bit of wishful
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thinking. >> he's a lot easier to understand. >> he carried the big bazooka everybody said and no one else has done it. there's much more of an attitude now. it was always done past the fed. people are now saying done past the ecb. and it will do what it takes in the markets serious lit and it wasn't just words because the omt program was put there with the conditionality and the market towards this side of syria. he doesn't want the euro to break up. they've taken him seriously. >> we're sort of in the catch-22 position. people won't test because of the omt. will they have get tested? >> in other words, we're in need of a standoff at the moment, right? >> yeah. unless the panic button is being held down in europe, they don't want to do anything. so there is a bit of a problem there as things relax, as you think there will be an omt.
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you don't bring some of the changes that you mentioned and then you get into panic mode again. but i think spain will come to the omt sometime in the first half of this year. >> sylvia, what do they think about that in frankfurt? >> well, so far, there was always a feeling that the spaniards would come around to omt to be able to draw for more. but i think that is back again in the court of politicians. will spain be able to basically hammer out a deal that is a bailout but doesn't put them into the full caution of a bailout because i think rahoy can't take that home to his own electorate and parliament. there is still amounts to some kind of program that will entitle them for omt.
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also, the markets will ignore what it is. every decision the esm makes has to go back to various parliaments, including the bundesstag in berlin. the markets don't want to hear, oh, wonderful, we can have direct bailouts without going around, basically without going for a sovereign bailout program, etcete etcetera. you might not need the sovereign bailout program, but you still need a government to go to the esp in. you need approval. you need approval from the parliamentes and then maybe you can recapitalize banks. it's still a very complicated affair before we get to anything that causes omt. >> no one really wants to go there. sylvia, thanks for that. we'll catch you later. japan now says it's looking to join forces with the cm to join a next generation pickup truck. let's get more with yukako. >> hi.
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the two automakers will be teaming up again, form ago powerful coalition that will control a 25% share in the global market. the two companies released separate statements today saying they'll be talking about developing next generation models. gm controls a leading share in the pickup truck market, but hopes to extend its lead over ford as close number two are getting back with eye sue zee. the japanese brand is strong in thailand and other southeast asian countries. the nikkei is reporting that the u.s. auto giant, a former shareholder of eye sue zisuzu w to restore their relationship. isuzu wants to cut supplied diesels. while the domestic market conditions to shrink, more japanese automakers too could be looking into such international alliances. that's all for me.back to you.
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>> thank you so much for that. as i mentioned earlier, the yen is at near 2 1/2 year lows against the dollar. currently at 88.48. in your contrary view, right? >> yes. i think the yen will stop weakening. every single year, the market looks for the yen to weaken and every single year practically they're wrong. and on this, they've found something new and dramatic going on in japan. and i don't deny that. but i don't believe they'll be able to achieve the goals they're setting for themselves. the 1% goal and they've basically had that for years. they've lived in deflation. that means they're going to have a 2% target and the question is how are they going to achieve na? well, they're going to change -- there's talk of them changing at the top from the bank of japan governor. two deputies, they have a super majority. they're very aggressive at the
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moment, no doubt about it. >> there's potentially aim going on between the u.s. and japan. japan looks to be aim to go be more aggressive. and with the last set of memberships, it looks like maybe the fed will stop being as aggressive earlier than we've thought. it's the change in aim that we're focusing on. >> i'm asking the question, i mean, the first stopping buying 80 billion a month forever. it wasn't really forever. japan getting 2% of inflation. i just don't take the bank of japan for that. because that's what they would have to do. >> at the end of the day, there's -- to change the mandate of japan for the super majority. and it's like a premiership
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coming in spain saying we're going to win the premiership and we've changed our goals to winning the fa cup and the premier league. how are you going to do it? and the markets are pricing in the risk of something radical happening. radicalization doesn't occur, then the process to move back again is totally rationale for the markets to price in a rift of something new and radical happening. the question is, will we get delivery? and i'm saying i don't think we'll get inflation in japan. the dollar/yen goes back down again. a popular view, i'm afraid. >> well, no, this is the market. this is the market, isn't it? meanwhile, the chinese data, 5.5 million pounds of oil a day in december. imports as a whole up 6.8% compared to the previous year. oil prices a little firmer today. and the present price is currently up to 112.
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we've got opec for saudi arabia trying to balance the supply and demand out. how do those two factors play out, first of all. >> i think china will be the key one to watch out for. i think if you look at consensus numbers, the last four months have turned around almost a million barrels a day. up theside surprise potential was quite large in 2013. >> when you say it was quite large, can you put that into -- >> well, it's this data could be another half a million barrels a day. i think it will struggle to continue at 24 stage because there was clearly some restocking going on there, as well. i would say 300, 4/00, it could be higher by around 200 to
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$300,000. >> what will be the impact on that? >> well, there is more supply coming online this year, as well. the north american supplies are looking very, very strong. i think outside america has disappointed for so lock that we still need to see better performance. but i think overall, stronger than h1 because demand is recovering quite well. we see more supplies. >> are you looking at the yen widening significantly this year? >> nk it's narrowing. i think the narrowing will happen in the second half of this year because there are lots of refineries still out for maintenance. >> a lot of on people are talking about shale oil coming on in the united states and not being a -- you know, imported. >> i think generally the spread will remain in the sense it's
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not going to go down. but we've seen around $20, $25, that's going to narrow down to around $15, 16, because there are lots of pipelines coming online. >> and we're just waiting for the spanish auction numbers to come out in just a second. we'll get to those. are nat gas prices going to get weaker? >> production is up at a record high again in the u.s. and, yes, you have already pretty much priced out call as much as we can. i think generally, because we are looking at supplies this year, we would see nat gas prices perform better this year compared to last year. but still they will remain much, much lower. >> actually, we're going to get those to the spanish bond auctions. just hang there. i've got to get to the spanish bond auctions. ahead of european rate strategy at ubs, just noticing
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spanish/german spreads narrowing a bit ahead of this auction. do you think it's been well bid? >> there's quite a decent rally, and in the 2018 bond. so a little bit less than the 2026 suggests that of course that the demand is at the front end. it also suggests that the markets, quite rightly, is no seeing any problems with the new bond which, of course, carried collective action clauses. i think what will be really interesting from the auction is how much is issued in aggregate. the spanish government has indicated 4 to 5 billion for the auction. this time last year, if you remember, they indicated 5 billion at the auction and they sold ten. so i think the spanish government with a lot of bonds to issue this year over 120 billion will be looking to sell autos much as it can today. obviously, with the rally into the auction, it was suggested some of the bids will be coming in below the current market
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value. but i'm not sure about the demand. i think demand is probably pretty strong. >> here we go. we're getting the results out now. they've sold three -- how is it? 3397 million euros in the 2013 bond. so 3.3 billion on that. 3.39. 1.95 in the 2018 and 470 -- 4719 over that 1.23 plus 3.3, 5 1/2, something like that. so that 5 1/2, they seem to be selling more than they were targeting. the yields on the 2015, 2.587. bid to cover 2.1. and the 2018 bonds, 2.6. the last auction, 2.1. the yield on that 2018, 4.03%. versus 4.9 in december.
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not much raise, that says it's 400 million. bid to cover ratio on that, 2.9. so i rattled through those. the yields is down on the one where we have the comparison, on the 2018 bonds, the five-year, and the bid to cover on the 2.1, the yield on that 2.587. what do you think? >> they've very solid. they've issued over 5 billion, more than expected. however, it is not the huge amount that they were issuing in january of last year, which is at that time was very much demand coming from the domestic banking system. i think the demand really for spanish government bonds at the moment is coming more from international investors as a relative thought of where it was before. we think that domestic banks will be buying less this year than they were buying last year. so i think these are solid results. spain has got a lot more to
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issue over the coming weeks and months and we'll see whether there's enough demand for that, as well. >> yeah. it's worth pointing out the euro on top of those auction results. >> yeah. i had a question on shale gas. >> we'll come back to that. >> the auction has gone well. as sylvia said, less pressure on the ecb. more likely that they'll cut interest rates as the euro goes. i think they're passing out some of the rates, the rate cut and this is giet good news. but some people think you need higher yields to they'll do something, but i don't believe that story. i think it's good news and less pressure on the ecb. >> we'll leave it there. justin, thanks for joining us. they've raised, by my rough calculation, around 5.5 billion
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above the 5 billion that they were looking at. yields looking fairly attractive. bid to cover -- >> i want to ask you a question because i'm totally confused on the shale gas story. on the one hand, the u.s. is going to be totally self-sufficient on energy. people believe in shale gas. other people say that the rates are enormous and yet the oil price doesn't seem to be coming down because of it. which one is it? is it a genuine story or is it -- which one is it? >> it's always complicated, isn't it? i think it's a mix of things. on the gas side of thing, they've seen phenomenal growth. the problem is, oil is a slightly different story. but both the oil and decline rates are phenomenal after literally a few days, the decline rate goes down from 50% to 80%. so you need to keep trimming a huge number of rates.
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it's very, very expensive. i definitely don't buy the argument that the u.s. is going to be independent by an x number of dates, no. there are lots of problems. infrastructure is massively messed up at the moment. pipelines go another way, oil production going another way. refineries, heavy crude, lots of issues to deal with. i think in terms of why isn't lower gas prices impacting oil, gas and oil don't interact these days very much. oil is a transportation thing at the moment. gas is the power sector. maybe in ten years time, you see pore gas and the international comes back again. at the moment, that's nos happening. and this results to shale going global, lots more challenges. structure over here geologically is not as conducive. china, the demand is huge. lots of pipe, lots of talk around it, but i think the reality is slightly different. >> thanks for that. >> thank you vep. >> do you feel better now?
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>> yeah, i do. oifb confused about this issue. it's been the talk of the market. it's been hyped up. the reality looks very different. i was somewhat confused, so thank you very much. >> there we go. we've sorted out david's confusion. also still to come, he's widely expected to be the new face of the treasury. not this man, but jack lew. coming back, we'll find out why david things sterling is the currency that's going to be under pressure this year.
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apple's ceo is visiteding china. the china mobility chairman said cooperation from china was discussed. they didn't think they would be able to sign a deal anytime soon with china mobile. we'll keep our eye owes that. keith jenkins sess testifying today in front of the parliament in britain. the first ever hearing was yesterday. the current investment of banking admitted that its culture whats change and it
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still has work to do to regain the public's trust following the libor scandal, as well. the. the bank of england is expected to keep the interest rate at a record low today. this comes as the obama administration delivers the message to britain saying you're special, but only special if you stay at the heart of the eu. they're under pressure to renegotiation the relationship with brussels. but the u.s. assistant secretary said such a plan would have major consequences. as chairman of the business in europe outlined on cnbc last night. >> we don't want to run the risk of trying to set the bar too high in the sense that there's some fantastic renegotiation we can have where we can cherry pick the bits we like, get rid of the bits we don't, because the chances of that happening are probably close to zero.
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so we don't want to see any risk in our membership. we want more reform by absolutely we do. we made that very clear in the letter. but we don't want to risk or membership because our membership is responsible for millions of jobs and underpins our future prosperity. >> so that debate is going to em. at the same time, david, you think the pound is going to come under pressure. it's a triple cocktail that's going to undermine it. what is that? >> yeah. that's the idea we had, we were talking last year about europe rate cuts, china hard landing. while those three big economies are under pressure, you have to buy everything and you think sterling is a safe haven. suddenly, the euro is not breaking up, the hard landing has been smashed to pieces and some of the fiscal cliff situations have been resolved. meanwhile, you're saying, why did it do that? so we think it will emerge from
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the shad dwroe of the others. the second problem is the growth situation is dire. we're heading towards possibly a triple dip recession and we're missing all the fiscal cliff targets. so growth, the fiscal side and the monetary side are not going to get more qe we think this year to off set austerity. we've bought nearly 375 billion. >> target? >> 152 or roughly on cable. 88 in euro/sterling. we've bought nearly 375 billion.
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you're watching "worldwide exchange." president obama is expected to tap jack lew to lead the u.s. treasury, replacing timothy geithner. chinese exports blow past expect ages in december, rising 14% on the year while raising expectations for next week's gdp reading. investors are still cautious ahead of interest rate decisions in europe with neither the ecb nor the bank of england seen changing their stance. plus, europe successfully places medium and long-term bonds for spain in its first auction of the year.
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if you've just joined us stateside, futures, the dow at the moment currently 38 points above fair value, the nasdaq is 9 points above fair value and the s&p 500 is just over 5 points above fair value. european stocks have been cautious throughout the morning. we've just hit the session high. the ftse cnbc global 300 is up about .25% at the moment. we'll show you the results of that auction in just a second. the european stocks, therefore, moving higher. the ftse 100 during the session yesterday hit the high since may 2008. it is up a two-year high. we only went through 6,000 a few sessions ago. the xetra dax is .3% higher. the ibex, as well. the cac 40 farley flat. there was a two, a five and a 13-year. yields were lower. the demand on the bid to cover,
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solid, as well. the spanish yield has come lower since that auction. the five year, 3.72%. we had about a 4% years compared to 4.8% in comparison with that auction. notable for the fact it was a fresh two-year. it included for the first time a new, collective auction clause which means it's going to be much easier to restructure debt in the eventual need for that eventuality. on the currency markets, the euro as a result has spiked higher. we're now at the session highs, back over 1.31. dollar/yen, not far away from that two-year high. we'll keep our eyes on the bank of england. trending slightly higher from the six-week low we've had at
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11.6046 for sterling/dollar. and we've had strong chinese export data, the most expensive in 3 1/2 years. iron ore hitting a report exports. it was restocking. spot gold slightly stronger, as well. let's get more reaction to that chinese data and has asia has traded. li sixuan has the latest for us out of singapore. >> thank you, ross. most asian bourses finished in the green as china's trade day surprised on the upside. the sensex index hit a fresh high before closing up .6%. counters led the gains while chinese airlines jumped after citi upgraded the seconder. the shanghai composite finished in the green, up .4%. a nuclear project has been rezumd after a 20-month
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suspension. some agriculture stocks have the gains on that market. exporters and financials continued to put the nikkei 225 higher today. the yen softened to around 288 handle against the greenback and this after prime minister shenzo abe asked the bog to adopt a 2% inflation target. in south korea, there were rallies. samsung electronics rallied 2% on bargain hunting. the kospi snapped a five-day losing streak ending higher by .75%. and the options over china gave a lift to the australian markets. the asx 200 reversed earlier losses to end in positive territory. metals climbed more than 2% after data showed china's imports of iron ore hit a record high in december. but trends were busted ending lower just by a touch. back to you, ross. let's remind you of what's on the agenda in the united states. weekly jobless claims out at
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8:30 eastern. forecast to dropped by 9,000. at 10:00, we get november wholesale trade numbers. a trio of fed officials is speaking today. the st. louis fed chief is out at 2:00 p.m. and the minneapolis fed prt cocherlakota at 8:00 p.m. president obama is expected to make the final touches to his second term economic scheme today. john harwood has more on the changes coming to the u.s. treasury department. >> president obama has already filled out the members of his national security team for the second term. now he's filling out the economic team for his second term, including his choice for treasury secretary. later today, we expect that the president is going to appoint his current white house chief of staff, jack lew, as treasury secretary to replace tim geithner who has been saying for some time that he wanted to leave. jack lew is an experienced figure in washington, veteran of capitol hill and of more than
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one major budget negotiations, which is exactly what the president is facing right now. he's somebody with a low key demeanor who gets along well with others. his confirmation is expected to be not too difficult. what he doesn't provide is a strong business background or wall street ties, although he did work for citigroup for a while. and he doesn't have the experience in financial regulation that tim geithner brought to the job having head of the federal reserve bank of new york during the financial crisis. but jack lew is expected to be announced today. the speculation about his replacement as white house chief of staff has centered in the last 24 hours around dennis mcdonough who is currently the adviser. sources tell me that mcdonough is the chief candidate. ron biden has also been a contender. we'll see whether the president pairs the announcement of the chief of staff with the appointment of treasury secretary jack lew today. back to you.
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and for the first part of this half hour joining us is george from nomura. george, is the markets going to be happy with mr. lew if that is indeed the case? >> well, we're in the middle of a fiscal kind of discussion. we got through the fiscal cliff. we still have to deal with the debt ceiling. we've surpassed legally the debt ceiling. now we're operating on these extraordinary measures. but it could be a critical decision. our focus on the economic team is critical given there's concerns over the long-term fiscal health of the company. overall, the markets are going to be cautious in thinking about, you know, it's an awkward time to be doing this transition, but it has to be done. >> yeah. meanwhile, i mean, we haven't seen treasury yields getting up to 1.9%. they have started to come back down, george. with that is 1.9, is that sort of the top of the range? if so, what is the range that
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we're now in? >> well, look, i think, you know, the market started out the year a little bit too worried about the fed minutes and thinking that the fed would take away stimulus and thinking that the fiscal cliff deal resolution was indicative of what still lies ahead. we think that the debt ceiling fight is going to be a long, drawn out battle. and pretty acrimonious along the way. it's going to be very difficult to sustain rates above 1.92% until you get these uncertainties out of the way. and the fed is buying treasuries for a long time. >> right. let's turn our attention, you mentioned the fed. plenty of focus, of course, on what's going on in europe, as well, with the ecb. we've got some -- we had a spanish auction out and italy selling 8.5 billion of 12-month t-bills, which is the good news. but the better news has been the spanish auction this morning. they've raised 5.82 billion euros. the maximum target was 5 billion. yields lower. demand fairly solid. it's boosted the euro to the
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best levels of the day, up to about 1.3140 we got to this morning. no doubt, that will please mr. draghi sitting over in frankfurt as they meet for their decision. joining george and myself, sylvia is back with us in frankfurt. sylvia, ever since he uttered those words, believe me, it will be enough, yields continue to come down in spain and they continue to come down at auction this morning. as the yields rises on that, he'll sit there and think, no need to do anything. it's all working very well at the moment. >> yes. he can be quite practical. this announced that they do everything they can in brackets within the mandate of the ecb and after that, the market kind of relaxed and said, okay, everything is going to be good. mario promises things. so far, they haven't actually had to do anything. of course, the potentially bad news about that is if anybody ever hopes that the spaniards will ask for an omc program or first look at some kind of bailout through the esm and then
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trigger an omt program, of course, the better news we get out of spanish auctions, the worse likelihood there is or the less likelihood there is that omt will ever be triggered. but if the yields move in the right direction, it might be actually the easier and the better of all solutions. in terms of what we can expect from today, well, i dare is at say not and all for naught. in terms of what the ecb has done, they've done pretty much what they can and now they have to wait on -- especially wait on how the eurozone economy pans out this year. in the beginning of this year, the expectation is that we stabilize at least and sort of scraping around the flat line maybe with a slight to the tendency towards the plus side because germany might still hold in a little bit of growth in the first and second quarter as the year pans out. so on the macro front, no real alarm signals right now if you don't look at things like the labor market and some of the
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sort of southern european countries where, of course, we talked about that. the social fabric is getting ever thinner. so apart from those alarm signs, the can he cb can sit back at the moment and say, okay, we wait and see how the markets develop, how the years develop and how indeed the macro scenario develops. and wait whether politicians have implemented all the things they have promised to us. i think that's pretty much what we're going to get out of the press conference today. again, sort of the waving finger, don't relax on your reform process, don't relax on implementation and we stand ready should we need -- should we need flanking measures, but that's about it. >> so, george, here we go. italian funding costs, sylvia has laid out the ecb. not going to do anything. 12-month costs in italy, the lowest in three years. spanish auction, very steady demand, as well. and the politicians seem to be holding out not stg asking for omt, right?
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>> at least for now. they've got the auctions done and oversubscribed. the key for us, there's a per verse reality going on. it's the start of the year. everything looks good. we're still riding the coat tails of the honeymoon that we have from last year. at some point, it's going to start to wear out. i think it will be close to the end of the benefit of all this supposed liquidity support. they haven't sent any money. the omt hasn't really started and they're still a full year ahead of us with a lot of issuance with the spanish in trying to do a pretty optimistic increase in issuance throughout the year of over 25% year on year. someone is going to have to adjourn write that fed and that's easy at these levels to keep going lower. at some point, there's going to be a buyer's strike. in the near future, there might be. and then you have the social issue where the recession is hurting the everyday person and in southern europe, at some
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point, that's going to come to the forefront, too. we do think that the ecb is going to skip this meeting out and have to rush into the beginning of the year. as we go through 2013, i think the euro will come back on the radar. >> and you've pointed out this massive disconnect between market pricing because of the draghi put and economic fundamentals which continue to theorize that spain lost 2,000 jobs a day. there's a depression there. there's such a huge disconnect between the two. >> yeah, without a doubt. at some point, you have to reconcile that. that is what is lying ahead for the discount. what has been happening in europe, you buy before the actually bank -- because yields were attractive. you have these carry trades and you also get this return because
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of the fed cop pregz. but at some point, it stops. maybe symbolically enough we're get to go that point. >> sylvia, what draghi is trying to do is to get yields to compress with german yields where they were and you try to close that gap. he's been successful in attempting to do that. wa about the economic fundamentals which clearly are not getting any better? it suggests germany will come out with the next quarter. >> well, i think there's two things in there. the ecb can't do anything more to try to pump the economy. this is about confidence. confidence has to return to the markets one way or the other and i think the ecb has done what it can do. the rest is up to politicians
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and maybe corporate organizations. the rest of it is the other part of the story is the ecb has done its job and -- >> unfortunately we've lost sylvia. apologies for that. let's remind you meanwhile of what's happened with the russell 2,000, closing at a fresh all-time high yesterday. up 16% in the last 12 months. george, we've started in a bullish frame of mind for the equities and for the risk on, as well. has that continued, do you think? >> well, look, what we want to do to see is real growth, not just kind of this false sense of security around nominal growth. i.e., trying to print month, to have people move out of assets into risk assets. that is what the central banks
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are going to try to do. they happen the fundamental toes support it. and the only way for the fundamentals to support it is if you get real growth. europe is going into recession. it's been in a recession type environment for a while. and the only grimace of hope is that the chinese economy has been showing signs of growth and the japanese are earmarking trying to get their growth profile. it's a race to the bottom. last year, there was a lot of risk that people thought we were going to have and didn't happen and then this year, thought there would be a massive allocation out of equities. i think that shows the first quarter is not going to be a one shot off the the risk markets. >> george, thanks for joining us
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this morning. we appreciate that. and now let's just remind you what else is still to come. two of the biggest names in hedge funds are locking horns over herbalife. we'll tell you what you need to know, coming up. with hotwire's low prices, we can afford to take an extra trip this year. first boston... then san francisco. hotwire checks the competitions' rates every day so they can guarantee their low prices. so our hotels were half price. ♪ h-o-t-w-i-r-e... ♪ hotwire.com ♪ [ male announcer ] some day, your life will flash before your eyes. make it worth watching. introducing the 2013 lexus ls.
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president obama is expected to ask jack lew to replace timothy giet noer later today. chinese exports beat expectations up 14% on the year. and investors remain cautious ahead of the rate decision from the ecb, but the euro hits a session high after solid demand for spanish debt auction. still to woman, venezuela's supreme court agreed to delay chavez's inauguration, but investors are still hoping for a change in the south american nation. nothing. are you stealing our daughter's school supplies and taking them to work? no, i was just looking for my stapler and my... this thing. i save money by using fedex ground and buy my own supplies. that's a great idea. i'm going to go... we got clients in today.
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with investment information, risks, fees and expenses to read and consider carefully before investing. ahead of the u.s. open, the first spanish bond auction of the year. we've just seen the spanish ten-year go below 5%. it's been a while since it was below 5%. so confidence as far as equity plays are concerned continuing right now. i don't know if we can show anybody that. i can tell you it has gone below 5%. we turn our attention now back to latin america. venezuela's supreme court has discussed plan toes delay venezuela's hugo chavez's inauguration. this as the opposition party
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steps up calls for the careta r caretaker. at the same time, bonds have rallied on speculation that a government transition could soon be under way. joining us with his thoughts, neal sherring. good to see you. >> good morning. >> what is going to happen in venezuela? >> i think it's very difficult to say with any precision as to what is going to happen next. i think what we can say is the expectations that we're going to get somehow a smooth transition for the current socialist@administration to a more market friendly administration, i think they're going to be disappointed. wa we've seen in the world over the past few years, is these transitions, when they do happen, are rarely smooth. there's always bumps along the way. i think actually if you look at the rally we've had in bond yields, as the bond markets -- >> down to five-year lows. >> down to five-year lows, but
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they start to sell off over the past couple of days. and i think that reflected a growing sense of the market that things aren't going to be quite as smooth. >> you said there's four reasons why the markets have been so sanguin. >> yes. i think one of the interesting things, actually, is how the currency markets have played the bonds markets. there's currency on the black market in venezuela has fallen very sharply over the past couple of weeks. that reflects good things locally that things aren't going to be quite as smooth as many expect outside of venezuela. and, obviously, investors outside of venezuela have been piling to currency bonds this morning. >> if we get -- you know, if mr. chavez were to leave office, i prooms one of the problems would be for the hopes of the government, there would be a big power vacuum, right? >> exactly.
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i think this is the thing. what we have at the moment is an opposition that is fairly dispratt group of characters and parties. chavez's party is military, some big business or what's left of big business in the oil industry. and, actually, whoever takes over for chavez is going to have a difficult job just holding all of that together. so i think we're in a period where powers is a very real and probable outcome from all of this. that is willing to have massive uncertainty and uncertainty, as we know, is not good for the market. >> a quick word on what happens with brazil's position in the market. will it be recovery, lackluster? >> i think there's a growing acceptance that there will be lackluster. what we saw months ago was investors thinking brazil was
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going to turn the corner. but, really, we've seep things start to pick up, but not to anywhere near the extent that they did after the 2008-'9recession. the only reason for that is they've basically hit the limits of credit-driven growth. growth will be better this year than it was last year. three 3%, 3.5%. pretty lackluster. >> thanks for that. we'll take a short break. still to come, we'll be in las vegas. see you in a few moments.
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hello and welcome to "worldwide exchange." a new man at the top, president obama is expected today to tap jack lew to replace timothy geithner. chinese equity ports blow past expectations in december, 14% on the year, raising expectations for next week's fourth quarter gdp reading peps. it's about rates today in europe. neither the ecb or are expected to raise rates. and span had a successful first auction of the year.
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okay. if you've just tuned into cnbc, good morning to viewers stateside right now furchls are calling for an upward opening. the u.s. market, s&p 500 at the moment is 4 points up, .28%. the dow at the moment is around about 31.5 points above fair value. european stocks, today the spanish bond auction, just come back from that. we're up because of two-year highs last night. and during the session yesterday, the ftse was up at the highest levels since may 2008. xetra dax higher, the cac 40 is flat. the ibex, up .5% a while ago. currently back up nine points. certainly get ago boost after the spanish auction results earlier. italy, 12-month funding costs for italy, down at the lowest for three years. and the spanish yield, 4.98% below 5%.
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this after they raised over 5.8 billion euros. three issues, much more than the 5 billion maximum that they were targeting. demand solid. yields coming down on the comparative issues, particularly on the five-year. this yield here, currently 4.97%. it was 5.76% back in july. so draghi's comments having an impact there. now, away tr from that. it's day three of the 2013 consumer electronics show. with the explosion of the smartphone and tablet devices over the past ten years, there are opportunities for companies to exploit the mobile space. our very own julia boorstin has been taken a look in las vegas. >> there's thousands of new devices here that will have major ripple effects. constant connectivity will drive facebook and twitter users. giving sales force, whose tools
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help companies manage social marketing a big opportunity to cash in. we spoke exclusively with salesforce ceo mark sunieoff. >> we spent $is 1 billion in acquiring companies to show our customers exactly how to connect with their customers, whether you're connecting on facebook, on twitter, whether you're listening like we're doing right here at our social media center. >> those companies are blogging the sales force because all these connectiones and tools have transformed marketing into a one-on-one conversation. >> and sales force have hoped brands be part of that conversation no matter where consumers are. i'm julia boorstin. back over to you. >> that's julia's report. for more, joining us now is tim stevens joining us from las vegas. tim, thanks very much for joining us. it's a strange time of the day,
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so we appreciate it. we started off with a lot of places on tv, the telegraph newspaper, talking about hedge funds at ces will wake the dead. what is standing out for you? >> definitely the tvs are a big story, both literally and figuratively. these are some massive tvs on the show floor. up to 101 inches. a lot of them are basically four times the revolution of a 1080p set. a lot of these tvs are big and beautiful. but they're very expensive at this point, upwards of 5,000 $5o $10,000 in the u.s. and there's not a lot of programming for them yet in the u.s. >> so the tvs will be one thing. we just heard julia. everybody is trying to engage with how the advance of smartphones and mobiles is impacting everything. what have we learned that might be new in that state? >> we're seeing a lot of
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converge yins across these different platforms. we're seeing some other new mobile platforms launching. also mozilla, who makes the popular firefox browser is here demoing a new operating system, as well. manufacturers are struggling to work across all these different operating systems. but we're seeing others like qualcomm to write applications that can run easier across operating systems like this. this will make things easier for the developers. they're having to spend a lot of money and having to move their applications from one system to the next which can be expensive. >> and some say it's all about software. is that fair or not? >> no, it's definitely not fair. we're seeing more of a resurgence of innovation on the gadget side of things.
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it's been huge for the launch and the innovation side of things. we're seeing a lot of small companies launching products at ces or simple things that are ingenious and they're going on and getting funded for millions of dollars. things like the pebble smartwatch, it can display information about what's going on. this was a small company, a great idea for some guys. and they're here launching their device for people to see. so software has been easier for people to get into traditionally, but with the rise of funding, it's getting easier for people to launch hardware here, too. >> that's an interesting development, as well. i've been reading a lot of about wearable technology, stuff that will monitor what you're eating, what you're doing. is that going to take off? >> i think it's time in 2013 for wearable technology to take off. he he gist mentioned the pebble
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smartwatch which is one of the bigger stories here. we're seeing a lot of heads up technology which is trying to catch up with the pr ask news about the project from google which is going to be launching this year. we're hearing rumors of a smartwatch from apple coming out in 2013. and you've mentioned the happy fork which is a fork that can measure what you're eating and tell you when you should stop eating, too. i think that will be a big thing here in 2013. >> then it becomes the unhappy fork. tim, thanks for joining us. i'm not sure whether you're about to go to bed or whether you just got up. whatever it is, vegas never sleeps, does it? no. >> it's vegas, absolutely. so i'll just keep right into things. >> good to see you, tim. thanks for joining us. we'll take a break. we'll ahead from one tinsel town to another. we'll head to hollywood for a preview of what films are expecting oscar gold. ♪
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a reminder of the headlines though morning, president obama is expected to tap jack lew to replace timothy geithner of the u.s. treasury later today. chinese ex sports beat expectations up 14% on the year. and the euro hits a session high as spain sees solid demand for
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the first debt sale of the year. the spanish ten-year yields below 10% for the first time -- sorry, 5% since march. this all as the ecb gets to decide on rates. all right. we'll see you out in l.a. in a moment to talk about oscar nominations. but first, the strange saga over her herbalife. the company continues to add new chapterer every day. cnbc's herb greenberg has more on this financial showdown on wall street. >> today promises to be a big day in the world of multi level marketing and herbalife. an analyst today in new york, company ceo michael johnson has promised to shred the thought that herbalife is a pyramid scheme. first news broke that the hedge fund manager of third point
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partners had taken an 8.2 stake of the company. the stock rose on that news. then the dow jones later in the day broke a story citing sources that the securities ask exchange commission had opened an inquiry into herbalife. the stock took a dive before recovering. but is herbalife a peer mead scheme? that's for the u.s. government to decide if it ever takes action. there are plenty of red flags flying over herbalife and the industry. some say the industry is creating a main street buffalo. >> madoff, kahn, a relatively small number of people are investment money. multi level marketing is using a different level of system. instead of taking $1 million from ten people, you take $10
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from a million people. >> but is it a peer medicine scheme? i recently sat down with michael johnson in his offices in wisconsin and we talked about the peer medicine question. why do you keep getting the question? >> because i think there's a preponderance in the industry that people like that term. i moved up six or seven levels. at the top was sitting as the ceo of the company michael isner. is that a pyramid? is that any different than what we're doing here? >> to have the question to answer -- >> full disclosure, transparency. people say these things but say. why not put it out there so people can say, gee, i'm thinking about having an her herbalife distributodistributor. then they have dinner and say, oh, that's a pyramid.
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nobody gets any wealthier in that company? no. not the case at all. we clarify it and put it out there. >> in the end, this is shaping up to be one of wall street's tug of wars and not just any tug of war, but a tug of war of the wall street titans. >> all right. michael johnson speaks with cnbc, appearing on "squawk on the street" at 11:45 eastern. find out more about this erbalife stars on our website. we've been working on this story for ten months for a cnbc investigation called "selling the american dream. on "find the full documentary at selling the dream@cnbc.com. well worth taking a look. in just a few short ours, there will be announcements for the oscar nominations.
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juan grover is the bureau chief at reuters. look, good to see you. we had faster yesterday, the british equivalent of the oscar nominations coming out. they had ten for "lincoln" and they had nine for "les miserables" and a couple of others, as well. are we going to follow the path of the oscar nominees or is it going to be different? >> no. it's going to be right in line with what you guys saw yesterday. you'll see "lincoln," "life of pi." there are so many options out there. now all the same groups go for all the same things. >> out of all those nominations for lincoln, steven spielberg wasn't nominated. would they correct that with the
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oscars? >> i think so. i think so. that's happened before a few times. once that spielberg won for director and didn't win it for best film, which is an odd combination. there's no accounting for how they vote because there's -- you may get 40% of one, 40% of the other. it's not necessarily a landslide in either direction. >> yeah. i mean, do you think -- you know, once we get the nominations out of there, what did the nominations do in terms of, you happen, for box office and in terms of dvd sales? if you get an oscar nomination, how much do you melt it in the run up before you get the winners announced? >> well, this is the super bowl, the world cup of hollywood. everything thinks it's christmas morning when they weak up and get a nomination. a few years ago, "crash" was even out of the theaters. they put the film "crash" back into theater. they threw out a whole bunch of
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dvds and made it from both of those things. this is a lot of attention, a lot of advertising that says, hey, we made it. we were nominated six times, eight times. >> and is "lincoln" going to be the one to clean up when the winners are announced? this is such a touchstone for people and this president in particular. >> yeah. no, i think it's wonderful timing from the point of view you just mentioned. and i think it has this largeness that the academy sometimes goes for. spielberg is pretty well liked. i think everyone would be surprised, a, if it's not nominated and probably if it doesn't win the academy awards. >> thanks so much. what time does it koumt in your time? >> in three short hours, thank you very much. >> you'll be a busy man. i don't know what you do between now and then. anyway, thanks for joining us. still to come, he's widely tipped to be the new face of the u.s. treasury.
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but does jack lew have what it takes? we'll talk about it, after this. ♪ [ male announcer ] how do you turn an entrepreneur's dream... ♪ into a scooter that talks to the cloud? ♪ or turn 30-million artifacts... ♪ into a high-tech masterpiece? ♪ whatever your business challenge, dell has the technology and services to help you solve it.
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we got clients in today. [ male announcer ] save on ground shipping at fedex office. aig has decide not to joiven a lawsuit by former ceo hank greenberg against the u.s. government. greenberg claims the company's 2008 bailout was unfair to shareholders. aig says it won't let greenberg's firm pursue its claims on the company's behalf. the ceo told cnbc joining the suit isn't in aig's best interest. and while the terms of the lawsuit may have been bad, a deal is a deal. >> what is important for this
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company is we're a company that you have to be able to trust. the government gave us that support and we paid back that support. without it, we would not be this strong today. so the real question is, did they approach that problem correctly and legally? that's hank's argument. >> the secretary burless has announced she is going to step down. president obama calls her a tireless champion for working families. while she's departing, a few cabinet members will be sticking around for the second term. attorney general eric holder, kathleen sebelius and eric zechy. the president is expected to make the final touches to his second term economic speech today. cnbc's john harwood has more on the changes coming to the u.s. treasury department. >> president obama's already filled out the members of his national security team for the second term. now he's filling out the
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economic team for a second term, including his choice for treasury secretary. later today, we expect that the president is going the appoint his current chief of staff jack lew as treasury text to replace tim geithner who has been saying for some time that he wanted to leave. jack lew is an experienced veteran in washington, head of more than one major budget negotiation. he's somebody with a low key demeanor who gets along well with others. his confirmation is expected to be not too difficult. what he doesn't provide is a strong business background or wall street ties, although he did work for citigroup for a while. and he doesn't have the experience in financial regulation that tim geithner brought to the job having head of the federal reserve bank of new york during the financial crisis. but jack lew is expected to be announced today. the speculation about his replacement as white house chief of staff has centered in the last 24 hours around dennis
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mcdonough. sources tell me that dennis mcdonough is the stop candidate. ron claim has been a contender. but we'll see whether the president pairs the announcement of the chief of staff with his appointment of treasury secretary today. >> thanks for joining us. investors are going to be comfortable with jack lew? >> well, ross, only time will tell, as john said. he has little or no business or wall street experience. he has no international experience. so i think we'll have to see some tension or a crisis arise before we know exactly how he's going to do his job as treasury secretary. but on the surface, i think the business community and the wall street community is going to have a little trepidation with this nomination. >> meanwhile, u.s. stock futures this morning, hank, are pointing
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to an upward start. we've had really strong export ground rebounding in china, seven-month highs. a solid spanish bond auction this morning, yields of spanish debt are back below 5%. what do you take from those two bits and what it might mean to the u.s. today? >> well, i think one of the themes this year is europe is going to get less bad. the ecb has put a firewall around the financial system, the banking system. they have stepped in and done what our central bank did four years ago. so that, yes, the economy is struggling, but it's unlikely we're going to have these flare-ups and financial crises that have marked the last three years. so that is all good news. the economy is going to continue to expand, albeit sluggishly this year. and corporate profits are probably -- they've been decelerating recently but we're probably at the low end here. if emerging markets continue to
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accelerate a little bit, we think profit growth can reaccelerate here in the u.s., at least by the second half. and this year there is no reason why we can't deliver positive returns just like we did last year. >> of the same magnitude, though? >> well, high single digits, low double digit, i think that's reasonab reasonable. to forecast anything higher than that, i think you're stepping out of the ledge. >> does that mean -- >> that's not a bad return in a low rate environment. >> look, a company instead of putting cash to work, are companies going to be very active on share buybacks, hank? is that a strategy? firms will be looking to buy back stock? >> well, i think as confidence continues to build, you know, we're into the fifth year of this expansion. you're going to start to see corporations loosen up the purse strings and increase share buybacks and continue with
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dividend increases. that's all good for shareholder returns. >> yeah. all right. we haven't got any earnings out from the s&p today. what are you looking for for you to give direction from this earnings season? >> well, look. the guidance has been brought down to negligible growth and we think that, once again, corporate america will exceed consensus expectations and that will be viewed positively. >> all right. hapg, good to see you. thanks for that. have a good day. joining us from haverfor investments. european viewers will continue to count down the ecb rate speculation. for the u.s. viewers, whatever happens, we hope you have a profitable day. cash card from capital one, sven gets great rewards for his small business! how does this thing work? oh, i like it! [ garth ] sven's small business earns 2% cash back
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